The auto stocks continue to be in focus given the uncertainty after the 25% tariff announcement by US President Donald Trump. In this situation, the question is what made the brokerage house Nuvama Institutional Equities expect the wholesale growth in tractors, 2-wheelers, and passenger vehicles to outperform that of commercial vehicles. Nuvama picked TVS, M&M, Motherson Sumi, and Uno Minda as its top auto bets.
Nuvama’s top auto bets: Two-wheeler growth prospects
It believes that the tractor sales to grow in double digits hauled by a benign customer sentiment and a favourable base. However, the two-wheeler and passenger vehicle segments may see low single-digit growth due to heavy inventory build-up with dealers ahead of festival season. In the PV segment, it expects TVS Motor and Eicher Motor-Royal Enfield to outpace other two-wheeler peers.
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Not just the domestic market but due to the help of exports, which are also expected to grow in double digits in Latin America and Africa. “We estimate total volume growth shall be 22% YoY for Eicher Motors,” said Nuvama.
Meanwhile, the commercial vehicle wholesale growth is likely to shrink to a marginal dip. The CV industry volumes are anticipated to be slightly negative, which is down 1% YoY in the domestic market. The selective financing by lenders and reasonable levels of fleet utilisation are limiting new vehicle additions. On the positive side, E-Way Bill generation has been higher than last year, indicating better freight availability for transporters.
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“We remain constructive on the automotive sector and estimate tractors, SUVs and two-wheelers would clock high single-digit growth over FY25–27, outpacing CVs,” said Nuvama in a research report.
TVS Motor, M&M share Price Vs Nifty
The share price of TVS Motor rose 1% to the day’s high of Rs 2,453.25 on the National Stock Exchange. It has risen 2.3% in the past five trading days and 4% in a month. The stock has given a return of 15% in the past one year.
M&M’s share price dropped as much as 1.7% to an intra-day low of Rs 2,695.55.
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